We’ve been blessed to have a very healthy real estate market in the metro Washington DC area for several years and as we head into the fall market that’s still the case.
Last month, we looked at some of the hottest areas in the region, with absorptions rates over 60% – what we call an “extreme seller’s market.” This month, we’re looking at the other end of the spectrum, where there is plenty of available inventory but less contract activity – those areas and price ranges where the absorption rate is 15% or lower, a buyer’s market.
Generally, that characterizes the market for homes priced over $1,000,000O – to be sure, there are some luxury markets that are hotter than others, but we’re focusing today on homes priced under $1,000,000 because that’s the heart of the market.
While we found strength in every community, we did find tipping points where a hot market transitions into a buyer’s market. (Frankly, it’s hard to find those points in the District!). Here are some examples:
In Ashburn, the market for townhouses priced under $600,000 is hot – but that’s the tipping point. Buyers have much more bargaining power for higher-priced townhomes. In Leesburg, the tipping point for detached homes is $700,000.
In Silver Spring, the market for townhomes transitions at $700,000 – in Gaithersburg, it tips for detached homes priced over $800,000.
Next to DC, Prince George’s currently has the strongest overall market in the region, largely due to its supply of entry-level priced homes. So it’s no surprise that their tipping point is at a lower price. Across the county, detached homes priced under $600,000 fare pretty well, but the market over that price favors buyers. Zooming in to just one area, National Harbor condos transition at just $300,000, and the tipping point for townhouses is at $600,000.
In the City of Alexandria, it is a seller’s market for condos priced under $500,000, but not over that price. In Vienna and Oakton, detached homes priced over $800,000 move more slowly. And it probably won’t surprise you that the market for the same type of home transitions at a different point depending on the community. For townhouses in Herndon, that point is $600,000; in Fairfax it’s $700,000 and in McLean it’s $800,000.
For reference, below you’ll find how we segment the market based on absorption rates. And if you want to know more about up-to-date market conditions in your neighborhood, we hope you’ll give us a call.
Want to know how your neighborhood is doing? Give us a call!